Project of strategic management

Topic: Porters national competetiveness

model (single Diamond model)
Submitted to:Vijesh Jain Submitted by:Group g
Amit Bhatia
Baninder guron
Jitendra sharma
Omraj singh
Rijushree gogoi
Shubham sethi
Vaibhav gupta

DIAMOND MODEL
The diamond model for the competitive advantage of nations
offers a model that can help understand the comparative
position of a nation in global competition .The model can also be
used for major geographic region.
Interlinked advanced factors for competitive
advantage :
FACTOR CONDITIONS:

Factor conditions are those that helps in best utilizing the

countries land ,labour ,capital etc .so in the same way In Larsen
and Toubro case they provide products and services to foreign
companies that are actively sourcing from India for cost
savings, trying to take advantage of the country’s low-cost but
highly productive labour force

DEMAND CONDITIONS:

If the local demand is high company can take the competitive

advantage at national level also.similarly happens with L&T They
see opportunities in the supply of equipment, turnkey projects,
and construction.” L&T told Indian media that they expects
orders from the region to reach US$458m this year, or almost
double from the previous year, and US$1 bn in 2009.Moreover
there is a demand for oil-refineries in Middle East also

Larsen & Toubro Ltd (L&T) has announced that the Company
has bagged four orders worth Rs 1687 crore from the
Government of Rajasthan, Bhushan Steel-Orissa, SAIL Bokaro
Steel Plant and the Damodar Valley Corporation (DVC). The
orders are for water supply projects, sinter plant and cold roll
mill and a coal handling plant. The Construction Division of
Larsen & Toubro has secured an EPC contract worth Rs 635
crore from the Public Health Engineering Department,
Government of Rajasthan, for Design, Supply, Build and
Commissioning of Banner Water Supply Project. The scope of
work involves laying of pipelines of various diameter in Mild
Steel extending to approximately 220 km; design and
construction of 172 MLD Water Treatment Plant, Raw Water
Reservoirs including supply and installation of Pumping
machinery, Electrical, Instrumentation and Automation control
systems. The project is scheduled to be completed in 18
months. When completed this project will cater safe drinking
water to the people of Jaisalmer and Barmer including Army
bases located there, benefirting the public at large. In another
development L&T - ECC in consortium with Outotec GmbH has
bagged a Rs 555 crore Sinter Plant order from Bhushan Steel
Ltd (BSL). The project is located at Meramandali, Orissa

SO it is concluded that demand conditions for L&T are highly

favourable

RELATED & SUPPORTED INDUSTRIES:

Larsen & Toubro is different. For now, it relies largely on
demand from India’s central and state governments and
domestic enterprises. But the company is starting to actively
seek and bid for projects overseas.In the last three months, the
National Highway Development Program, the central body
implementing road projects, awarded contracts worth about
US$1 bn, 16% of which went to L&T. Recently, the company also
won contracts to build international airports in the prospering
cities of Hyderabad and Bangalore. Among recent private-sector
projects, Tata Steel awarded L&T last month with a US$356m
contract to build a new blast furnace. “L&T is a macroeconomic
play,” says the analyst, referring to the company’s stock. “It is
the best out there if you want to capture the growth of the Indian
industrial sector, which is a macroeconomic parameter.”
FIRMS STRATEGIES STRUCTURE AND RIVALRY:
. While local competitors for L&T are increasingly becoming
more aggressive in bidding for public and private ventures,
analysts see L&T’s market share protected for some time to
come, thanks both to its scale and the highly fragmented nature
of the sector. (L&T’s revenues are seven times that of its nearest
competitor, Gammon India.) “L&T’s competitive advantage is
scale of operation and experience over the years, so the cost
structure of the company is the best among local players,” says
an analyst with a local brokerage. “Handling any large-scale
contract which involves complexity is L&T’s forte.”he that global
engineering giants such as Bechtel, which is four times the size
of L&T, are more capable of undertaking large-scale projects at
low margins, owing to the scale of their operations. L&T, for
example, has yet to make a 5,000-megawatt power plant
anywhere.

Ultimately, two things will determine how well L&T can position
itself in the international arena: the growth of the domestic
sector, which will give it scale and cost-competitiveness, and the
strength of its balance sheet to be able to take on higher-value
but bigger-risk projects.